Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are at the court’s discretion, and the court may determine by whom and to what extent the costs shall be paid.
The Family Law Rules, Rule 24, outlines specific considerations for awarding costs in family law litigation. The recent Ontario Superior Court of Justice case of N.T. v P.T. will be discussed in this blog to illustrate how the courts apply the Courts of Justice Act and the Family Law Rules to apportion costs after a family law trial.
Costs rules in family law matters have four primary purposes
The court in N.T. v P.T. distilled the four purposes of modern costs rules:
- To allow successful litigants to partially recover their costs;
- To encourage litigants to settle matters before trial;
- To discourage and sanction inappropriate behaviour; and
- To ensure that cases are dealt with justly.
Success is one important consideration in awarding costs
Rule 24(1) of the Family Law Rules presumes that the successful party is entitled to their costs.
If success is divided (i.e., one party wins some issues, and one party wins some others), then Rule 24(6) provides that the court can apportion costs. However, “divided success” is not a mathematical formula in which the court will tally the number of issues and determine which party succeeded on more issues. The court in N.T. v P.T. noted that most family law cases include more than one issue, but not all issues are equally important or costly to litigate.
In N.T. v P.T., the court found that the mother was the more successful party, though the father had some success in defending a claim related to section 7 expenses for the parties’ children. However, the court determined that the primary issue of the trial was spousal support, and on this issue, the mother was successful.
The court will consider the successful party’s behaviour
Rule 24(4) of the Family Law Rules provides that even if a party is successful –and therefore presumptively entitled to their costs under Rule 24(1) – the court may decline to award costs or even order costs against the successful party if that party behaved unreasonably. In N.P. v P.T., the mother, as the successful party, did not behave unreasonably, and this consideration did not impact the court’s cost analysis.
The court will consider the parties’ offers to settle
Rule 18(14) of the Family Law Rules provides that if a party makes an offer to settle and then receives a result that is as favourable or more favourable than the offer, they may be entitled to increased costs. This did not apply in N.P. v. P.T., as while both parties served offers to settle, the result was not as favourable or more favourable than the offers. However, offers not meeting this threshold can still be considered in costs, as set out below.
In setting the quantum of costs awarded, the court will consider a variety of other factors under Rule 24(12)
Rule 24(12)(a) of the Family Law Rules provides a list of factors to consider in determining the appropriate quantum of costs. Rule 24(12)(a) provides that the court shall consider:
The reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:each party’s behaviour,
- the time spent by each party,
- any written offers to settle, including offers that do not meet the requirements of rule 18,
- any legal fees, including the number of lawyers and their rates,
- any expert witness fees, including the number of experts and their rates,
- any other expenses properly paid or payable; and
- any other relevant matter
The issue in N.T. v P.T. was important to both parties
In N.T. v P.T., the case was primarily about spousal support. The court found that the trial’s outcome was important to both parties, albeit in different ways. For the father, he was seeking clarity on his obligations. For the mother, spousal support was of particular significance as she had health concerns and a substantial need for support. There was a lot at stake for the mother, as the father was seeking that she re-pay amounts already paid to her, which would have had severe financial consequences for her.
The issues in N.T. v P.T. was of moderate complexity
The court considered how complex the spousal support issues were. While there were some evidentiary and legal issues with some additional complexity due to the disability issues of the mother and the lack of clear guidance in the case law.
The unsuccessful party did not behave unreasonably or disproportionately
The mother argued that the father behaved unreasonably. The mother claimed that the father should have made more concessions concerning her health issues and their impact on her ability to earn an income. She claimed that his refusal to make these concessions caused the trial to take longer and be more expensive.
The court was careful to note that having an unsuccessful claim does not mean that the claim was unreasonable. While the father was largely unsuccessful, and while the court found that some aspects of the father’s approach were problematic, the court declined to increase the mother’s recovery based on the father’s unreasonable behaviour.
Both parties made offers to settle
The court considered that both the mother and father made offers to settle and attempted to settle the issues, but given the substance of those offers, neither party was at fault for not accepting the other. The court, therefore, considered this a neutral factor.
The successful party’s costs were reasonable and proportionate to the issues and complexity of the case
The court will consider reasonableness and proportionality when looking at the time spent, the legal fees incurred, and the bills of costs. The court will consider these against the backdrop of the importance and complexity of the issues.
Rule 24(12.2) requires a party who opposes costs to provide documentation showing their costs, though the court notes that this is good practice in any case. Both parties provided detailed Bills of Costs.
In this case, the mother’s bill was about $30,000 more than the father’s. The court found that the mother’s bill was not excessive or overreaching, so the court would not second guess her lawyer’s approach. The court also noted that the bill was not so excessive that the court would engage in a line-by-line review of the mother’s lawyer’s Bill of Costs. The overall amount was still within the boundaries of reasonableness and proportionate to the issues.
The successful party was awarded approximately 60% of her total fees
The court in N.T. v P.T. awarded the mother $55,000 in costs. This represented just under 60% of the mother’s total bill, including HST and disbursements. The court noted that it is possible to award closer to full recovery of fees under the Rules but that, in this case, the mother was not entitled to this. For instance, there was no bad faith on the father’s part, which is one way that a party can be entitled to increased fees or based on her providing an offer to settle that was as favourable or more favourable than the result.
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